Apple's iPhone-based 'Pay' launches this week

Owners of iPhone 6 and 6 Plus handsets will be able to use them to buy items
from Walgreens, McDonalds and Staples in the US from this weekend, suggest
reports - but Apple staff are already using it to buy lunch in their staff
canteen

Pay allows users to buy goods and services by tapping their phone against a payment terminal, like contactless bank cardsPhoto: AP

Apple’s iPhone-based ‘Pay’ will launch this weekend and allow customers in the US to buy goods and services by tapping their new 6 and 6 Plus handsets against a payment terminal – but reports from inside Apple’s headquarters reveal that employees are already using it to buy lunch.

A leaked internal memorandum to staff at retail chain Walgreens says that it will adopt the service on October 18. McDonalds, Macy’s and Staples are also known to have signed up to adopt Pay.

Leaked documentspublished by 9to5mac.com show that Apple store employees will have to take an hour of training this week to learn about the payment system. It also reveals that the system is up and running already at the Caffe’ Macs staff canteen at the Apple headquarters in Cupertino.

The reports have led to speculation that the company will announce details of the launch at the iPad launch event it has scheduled for the 16th.

Apple announced the new Pay feature last month when it unveiled its new iPhone 6 and 6 Plus handsets. It says that it hopes it will replace the "fairly antiquated payments process" of credit and debit cards.

Apple Pay will be built into every new iPhone 6 and iPhone 6 Plus. It uses NFC chips which can communicate securely and wirelessly, and uses the Touch ID fingerprint sensor to authenticate purchases.

Speaking at the Apple launch event, chief executive Tim Cook said: "This whole process is based on this little piece of plastic, whether it’s a credit or debit card. We’re totally reliant on the exposed numbers, and the outdated and vulnerable magnetic interface, which by the way is five decades old, and the security codes which all of us know aren’t so secure."

Using the iSight camera built-in to the new iPhone you can take a picture of your bank card and the details will automatically be added to the service, under an app called Passbook. From then on you can make payments in any compatible shop simply by tapping your phone and pressing your finger on the Touch ID sensor.

When you use the service Apple is not aware of what you bought, how much it cost or where you bought it from - that information passes directly to your bank. The shop also does not get to see your payment details. Apple claims that this makes it much more secure.

Apple has teamed up with MasterCard and Visa to launch the service in the US. It will launch in the US this week, and Apple says it is "working hard" to bring it to more countries. But there is no word yet on a launch date in the UK.

While the feature is expected to make a strong impression in the US, where credit cards are less sophisticated than the UK which uses chip-and-PIN technology, experts predicted that gaining market share in Britain would be more difficult.

David Blackwell, Deloitte's telecoms partner, said: "In the UK, the 40 million contactless NFC payment cards currently in use already address the desire to make small in-store payments quickly.

"It may well be the case that a mobile device manufacturer could take a big slice of the NFC payment market, but gaining the trust of consumers to handle payments securely will be a critical factor. Notwithstanding the convenience of having a smartphone that can be used to buy your sandwich or pay for your tube fare, Deloitte’s research suggests that – in the short term at least - people will still be reticent about using their phone as a form of payment.”